![COLUMN | The irrationality of markets: Tidewater and Wilson Sons; Saipem, Deep Value Driller and Eldorado; Bourbon Evolution 805 and 807 [Offshore Accounts]](http://media.assettype.com/bairdmaritime%2F2026-03-01%2F5kfnqdtl%2FUntitled-1.jpeg?w=480&auto=format%2Ccompress&fit=max)
Can the tanker crowd please keep the noise down? Offshore is still nursing a bit of a hangover.
As charter rates for very large crude carriers soared past US$200,000 per day, presaging record profits for Frontline, CMB and the new kid on the tanker block, Korea’s Sinokor, which has made a bold foray to try to corner the market, offshore companies published their fourth quarter results, which were, well, decidedly meh.
Seadrill reported a net loss of US$10 million, Transocean eked a net income of US$25 million, Valaris made US$37 million (excluding the benefits of a whopper tax benefit) and Noble published net income of US$87 million for the quarter. Between them, the companies operate nearly a hundred rigs, so this is a profitability of less than US$1 million per rig per month – not exactly stellar, especially since three of the players wiped all their debt in Chapter 11 restructurings and since the prices of modern deepwater drillships are now firmly pegged at US$300 million a unit.
My comment that the best phrase to describe the geopolitical situation in 2026 is “batsh*t crazy” still stands. Rather than offering opinion on the situation in Iran and the wider Gulf this week as promised, we look at the biggest offshore supply vessel deal of the year so far, plus a tug of war over a rig that proved me wrong, and the divergent values of the Bourbon Evolution 800 series of subsea support vessels in the ICBC auction of the parts of Bourbon’s fleet in default to the bank.
Just as we went to press last Monday, Tidewater announced that it was acquiring Wilson Sons UltraTug (WSUT), various affiliates, and its fleet of 22 platform supply vessels (PSVs) in Brazil. The sale of WSUT was not a surprise, not since container giant MSC received regulatory approval to take over its 50 per cent shareholder, Brazilian port and maritime logistics operator Wilson Sons, in 2025, leaving the offshore business looking decidedly “non-core.”
We had already highlighted “Brazilian rumours” in late 2024, when the MSC purchase of Wilson was first announced, that Tidewater might cherry pick WSUT as part of its Pac-Man strategy of gobbling up its competitors.
“Tidewater is the world’s largest PSV operator, but it has a very limited footprint in Brazil, which is the one market where it could expand without fear of anti-trust rules slowing or obstructing an acquisition,” we had noted at the time.
This was basically the sales pitch which Tidewater CEO Quintin Kneen made in the presentation to investors last Monday. Aside from private equity, few buyers in the offshore sector have the deep pockets needed for the deal, nor the desire to go large in Brazil, a market typically associated high headline day rates and long charters, but also much higher costs, abusive charter party terms from Petrobras, and a complex and punitive tax system.
One might want to consider why, after 65 years in the business, Tidewater had only six ships from its fleet of over 200 working in Brazil at the time the transaction was announced.
Tidewater has had numerous opportunities to grow in Brazil and historically it has not, for the reasons described above. Looking back twenty years, the company had 101 ships working in central and South America, being 27 per cent of its fleet, and its then CEO Dean Taylor identified Brazil as a “area of opportunity” for a company that then operated nearly 400 ships and had debt of just US$300 million.
One reason why Tidewater might need to be cautious is its past experience. To give one example, here is an excerpt from Tidewater’s 2015 report filing:
“In April 2011, two Brazilian subsidiaries of Tidewater were notified by the Customs Office in Macae, Brazil that they were jointly and severally being assessed fines of BRL155 million (approximately US$39 million as of December 31, 2015). The assessment of these fines is for the alleged failure of these subsidiaries to obtain import licenses with respect to 17 Tidewater vessels that provided Brazilian offshore vessel services to Petrobras, the Brazilian national oil company, over a three-year period ending December 2009.
"After consultation with its Brazilian tax advisors, Tidewater and its Brazilian subsidiaries believe that vessels that provide services under contract to the Brazilian offshore oil and gas industry are deemed, under applicable law and regulations, to be temporarily imported into Brazil, and thus exempt from the import license requirement. The Macae Customs Office has, without a change in the underlying applicable law or regulations, taken the position that the temporary importation exemption is only available to new, and not used, goods imported into Brazil and therefore it was improper for the company to deem its vessels as being temporarily imported.
"The fines have been assessed based on this new interpretation of Brazilian customs law taken by the Macae Customs Office….”
As Charles de Gaulle observed, “Brazil is the country of the future… and always will be.”
After so many foreign shipowners have entered the Brazilian market and exited with their fingers burnt, one has to question whether, “this time it will be different,” for Tidewater.
In our festive themed Mariah Carey piece in November, we had highlighted that WSUT was an acquisition option for the Houston-based industry leader, but reckoned that Tidewater would move against a North American rival like Hornbeck or Harvey Gulf instead.
It may still do so later this year, as even after taking on US$261 million of long-term, Brazilian state bank-financed debt associated with the WSUT fleet (which we reckon is probably financed at around nine per cent a year), Tidewater remains a remarkably underleveraged business, and one that still lacks the kind of dominant market share needed to really reap monopoly profits.
The company managed to wipe out of all its legacy debts in a Chapter 11 restructuring in 2017, unlike most of its non-American rivals, so it still has strategic options that might include further acquisitions or a sorely-needed newbuilding programme.
Norwegian investment bank Pareto was handed the mandate to sell WSUT last year, and achieved a fine price of US$500 million, with the sellers also able to claim half of any successful future legal proceedings against primary customer Petrobras in the mysterious and clearly large case, referred to in the sale documents on page 184. It is not certain what the claim covers, or how much is at stake, but the legal effort that has gone into sharing the potential upside in the documentation suggests it could be material.
Tidewater’s stock has continued a surge that has seen the shared rise from US$50.51 at the end of last year to just under US$80 at the close of business on Friday, February 27, up nearly 60 per cent in less than two months.
"Watching when a company’s managers buy and sell shares is often an important signal," we observed at the time when we reported the deal. "Tidewater’s management have an uncanny ability to buy their company’s stock at lows and sell it at highs. Watch and learn."
Loh and behold, the same day that the WSUT deal was announced, Tidewater’s Executive Vice President and General Counsel, the man who signed some of the deeds of sale for the company, Daniel Hudson, was out in the market dumping US$1.1 million worth of the company’s shares, on top of the US$700,000 of company stock he sold on February 11.
If Mr Kneen the CEO joins the selling, this would mark a new trend and a big red flag like it was in 2024.
On paper, the WSUT fleet should be attractive to Tidewater. The company is a pureplay PSV owner with 13 large PSVs with an average age of 12 years and 826 square metres average clear deck space. Nineteen of the 22 vessels in its fleet are Brazilian-built, which means that Tidewater has the right to import other foreign-built vessels into the Brazilian registry under the REB temporary flagging scheme, with the same cabotage protections as with locally built ships.
The large PSVs in the WSUT fleet are younger than the average Tidewater fleet age of 14 years in March 2026, and are clearly high specification, including 920-square-metre clear deck space units of the same design built in Brazil. However, there are also nine smaller PSVs with an average age of 17 years and an average deck space of 617 square metres, and not all of them are even DP2. The merits of these ships are questionable, especially given that Petrobras, which employs 19 of the 22 ships, claims to have a 20-year age bar, banning older ships from holding contracts.
Buying WSUT acts as a sugar rush to Tidewater’s earnings, but it does not solve the longer-term problem that its fleet is ageing fast and that with a 14-year average age today (see Tidewater slide on page four of the WSUT presentation), Tidewater risks obsolescence and irrelevance in the next decade without significant investment. In the 2006 presentation above, the company had faced the same problem at the turn of the millennium, and had aggressively ordered or acquired more than 100 new ships at a cost of US$1.7 billion to ensure that its fleet remained modern.
Tidewater’s then CFO Keith Lousteau summed up the company’s position at that time twenty years ago as, “what a great time to be associated with Tidewater. It’s kind of, come to the office in the morning, get a wheelbarrow to bring the cash to the bank. It’s just been a real nice position.”
I would argue that the difference now is that the management is taking the cash to the bank for themselves, and the shareholders have been left with a highly volatile stock that whipsaws around and a fleet that will need progressive replacement starting now, even as it promises to throw out prodigious cash in the coming years.
One of my most certain predictions for this year was that Saipem would exercise its option to buy the deepwater drillship Deep Value Driller, which it has bareboated for the last three years from the eponymous Norwegian company that acquired the rig from the creditors of Fred Olsen Energy in 2021 for a bargain basement price of US$85 million (history here).
Having said that on February 16, I was gratified to read the next day that Deep Value Driller and Saipem had announced that Saipem would buy the drillship for US$272.5 million in cash, subject to final approval by the boards of the two companies. Saipem announced its board had approved the purchase on February 24.
So far, so good. But then, unexpectedly, the wheels fell of the deal when Deep Value Driller announced that it had received an unsolicited offer from Eldorado Drilling to acquire the rig for US$300 million. It said its board would not approve the sale to Saipem. Arrivederci, Milano!
Instead, Deep Value Driller’s directors suddenly agreed that Eldorado provided “the best available alternative” and hastily entered into a binding agreement to sell the rig to the Norwegian company, quickly pocketing the US$70 million deposit from Eldorado, as per Esgian.
Eldorado and Deep Value Driller are companies with overlapping shareholder bases, and for a period, both companies had the same CEO, Svend Anton Maier. Now Eldorado is run by the former Diamond Offshore VP, Neil Hall. As we have seen with its loss-making sale of the drillships Draco and Dorado to the Turkish state oil company in mid-2025, and the expensive delays and budget overruns to mobilise and get onhire its only remaining rig, Atlantic Zonda, Eldorado is a company strong on strategy and weak on execution.
The haste with which Deep Value Driller’s board accepted the Eldorado offer and banked the deposit suggests that there was not really a competitive play at work. Why not go back to Saipem to get an even higher price?
I remain sceptical that Eldorado will be able to operate the rig profitably itself (Ventura actually operates Zonda in Brazil, as Eldorado has no track record or experience actually drilling). I am also sceptical that the redelivery process from Saipem will not be fraught with disputes, as redeliveries from bareboats often are.
And after Eldorado spent two years failing to charter Draco and Dorado, I seriously wonder how long it will take the company to fix the rig into a new contract. Would anyone serious choose Eldorado as a rig operator over the combined Transocean-Valaris entity with ample warm-stacked deepwater capacity and 30 years of operational experience in deepwater?
For Saipem, losing the rig is annoying (although maybe Eldorado would be content to pocket a five million dollar profit by flipping the rig back to the Italians on the date of delivery, stranger things have been known). But Saipem has the luxury of a strong balance sheet and a strong relationship with its main client and shareholder, Eni.
There are other rigs out there that Saipem could take. I would imagine that Keppel would be interested to finally see Can Do go on bareboat and off its books.
Redelivery of the rig from Saipem to Deep Value Driller is slated for July 31 and then the sale to Eldorado will occur. Based on the events of the last two weeks, a lot could happen between now and then. We will keep you posted.
If the 10 per cent price increase for Deep Value Driller in a week seems surprising, you have only to look at recent events in the ICBC auction to see that offshore asset markets are often not fair or coherent.
We reported that on February 6, the subsea support vessel Bourbon Evolution 807 had been sold at auction on the Shipbid.net website to buyers believed to be Astro Offshore. There were no other bidders, so the ship was sold for the reserve price, uncontested.
For a 2014-built, DP3 vessel with 1,200 square metres of clear deck space and both a 150-ton active heave compensated crane and a 40-ton secondary crane in operational condition (full specification here), this was an exceptional bargain, a deal of the year. Kudos to Astro.
But last Friday, February 27, the market snapped back. The identical sister vessel Bourbon Evolution 805 was auctioned with the same reserve price and the same port of delivery (Abidjan) on the same platform. This time, the bidding was fiercely contested. The vessel started at US$35 million but finally closed at US$46.5m, over 30 per cent higher, much closer to my estimate of fair market value.
The two ships selling for such divergent prices show that in offshore markets, there is no consistency. The markets are illiquid. It only takes a second buyer to emerge for prices to rise sharply, as Saipem discovered.
There will be more 80-ton bollard pull, DP2 anchor handlers sold in the ICBC auction later this month. So far, Britoil has been the main buyer of this tonnage, typically paying just around US$9.5 million for Bourbon Liberty 300 series ships. Let’s see if they can mop up further ships from ICBC as the Singapore-headquartered player continues to expand fast.
